There’s also the dividend factor. Thanks to its stock appreciation, J&J’s dividend yield currently stands at its lowest point since 2010. Dividend-oriented investors might not be as attracted to the stock as they used to be.
The same goes for value investors. Johnson & Johnson (NYSE:JNJ)’s stock now sports a trailing price-to-earnings multiple of 21. It hasn’t been this richly valued since 2006.
By comparison, Pfizer Inc. (NYSE:PFE), which has a similar-sized market cap, pays a dividend yield higher than Johnson & Johnson. Pfizer Inc. (NYSE:PFE) shares also trade at a P/E of 15, well below J&J.
Running the distance
I wouldn’t be surprised to see the Johnson & Johnson (NYSE:JNJ) stock run halted in the near future. However, I think if it happens, it will be due more to profit-taking and macro events than any problems with the stock itself.
And any roadblocks that are encountered should only be temporary, in my view. Johnson & Johnson’s stock remains one to hold for the long run.
The article 1 Potential Roadblock for the Johnson & Johnson Stock Run-up originally appeared on Fool.com and is written by Keith Speights.
Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool recommends Covidien and Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson.
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